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Presentations

2014 is the year of Mexican Reform

During Mexico Now’s December 2013 Auto Industry Conference, Baker & MacKenzie’s Manuel Padron and Luis Carbajo focused on the topics of recent changes made in the areas of Mexican customs and taxation. Mexican reforms in customs and taxes include some significant changes that companies operating in Mexico, or considering the possibility thereof, should be aware of and take into consideration.

On the customs side the general aim of the Mexican reform to be implemented in 2014 that was discussed at the Mexico Now conference is to put mechanisms into place that result in the facilitation of foreign trade. One of the critical steps that must be taken to make this happen, as pointed out by Padron and Carbajo, is the implementation of customs infrastructure investment by the Mexican government. This would include the installation and utilization of non-intrusive technologies to facilitate customs clearance.

Another important change wrought by Mexican reform in the area of customs has to do with the use of customs brokers. As a result of recently made changes, it is no longer a legal requirement to use a licensed customs broker in Mexico for the execution of most import-export operations. Customs transactions can now be made by an individual, or by a legal representative that must be a Mexican national with experience in conducting foreign trade operations.

Another significant aspect of Mexican reform related to customs is the reduction of fines by fifty percent. The reduction is only granted if payment is made prior to a final resolution of the matter under consideration.

The presentation for which a link is provided below also references Mexican reform made in the area of taxes. This includes information on the Mexican VAT tax changes affecting the border region, as well as the modifications that have been made regarding temporary importations, and the valuations that affect calculations in their regard.

“The Tecma Group of Companies' services allow me to concentrate on making and selling wood pallets. I have Tecma handle all administrative functions, Mexican Customs, human resources, all permitting, as well as the legal aspects of manufacturing in Mexico. It’s a very good, complementary relationship. They provide me with a project manager, which means I don’t have to deal with a lot of individuals. I deal with one individual, who then deals with experts in all relevant disciplines on my behalf.”

“When we purchased the Dashmat product line, which is the product that we are manufacturing in Ciudad Juarez, we were able to establish a Mexico manufacturing plant with Tecma very quickly. They got us up and running very smoothly under their Mexico Shelter Manufacturing Partnership (MSMP). We like Tecma because it is a stable company that has been around for many years, and looks to be around for many more. Tecma appears to care about our Mexico business' success is very responsive to our needs.”

“Since we started, we have been able to maintain a competitive advantage over many of our competitors that have moved their manufacturing to China by reducing lead times to 4 weeks less than most of our competitors. This has given us the ability to compete on pricing against many of our competitors that have gone to China. We found that in our Juarez staff in Mexico we found a highly-trained workforce with strong background, and the capability to do mannequin manufacturing in Mexico.”

“More than a decade ago, Portage Electric Products Incorporated was faced with the reality that we were going to have to consider manufacturing in another country in order to maintain our competitiveness in the global marketplace. We chose Mexico, as we could be here literally within hours, should the need arise. We chose the Tecma Mexico Shelter Manufacturing Partnership (MSMP) because it provided virtually everything we needed to begin with and support an ongoing Mexico manufacturing operation.”

This quarterly publication will be populated with content that is useful and relevant to readers that are contemplating Mexico investments, have operations already within the Republic, as well as to other individuals that have an interest in Mexico and its manufacturing sector.